Changing Articles of Incorporation
Changing articles of incorporation refers to editing of documents that were initially used to create a corporation or an LLC due to business changes over time.3 min read
Changing articles of incorporation refers to editing the documents that were initially used to create a corporation or an LLC. A business's needs and goals may change over time, leading to a need for changing the articles of incorporation.
Changing Articles of Incorporation
Articles of incorporation are defined as the contract between a corporation, the state government, and the shareholders of that corporation. With so many separate parties involved in a corporation, common law requires majority approval from all shareholders to make changes to the original articles of incorporation.
Common law is not legally binding, however, and many states today do not even recognize common law. This means that corporations do not always require the approval of all shareholders to make articles of incorporation changes. There may be other requirements that need to be followed, depending on the setup and structure of the business. There are many reasons that a business might choose to change the articles of incorporation:
- A business's needs and knowledge changes over time.
- Business growth may lead to a change in business goals or intended direction.
- Existing officers may leave to seek out other business opportunities.
- Existing officers may pass away.
It is important to keep a business's bylaws and articles of incorporation updated.
What Are Articles of Incorporation?
Articles of incorporation are the legal documents that are used to create a corporation. They are a requirement in every state to legally register the business. While the exact information requirements vary from state to state, articles of incorporation generally include the following information:
- The name of the corporation
- The start date of the business
- The type of corporation
- Name and address of the registered agent
- Name and addresses of all directors
- Name and address of the incorporator
Incorporating a business separates the legal liability from the businesses owners, officers, and directors. Filing for incorporation also has tax and financial planning advantages. Changing articles of incorporation often means changing things like agent names, the businesses operating name, addresses, and stock information. The most common reason that businesses change the articles of incorporation is to change members' information. It is important to amend the articles of incorporation for any major changes to avoid legal consequences.
Corporate bylaws tend to be more complex and detailed than articles of incorporation. A company's bylaws provide details about the business's activities and responsibilities. Bylaws often include the following information:
- Business officer's official titles
- Board election procedures
- Minutes and schedules of meetings
- Voting procedures
- Dispute resolution processes
- Business procedures
- Amendment procedures
- Business logo or seal adoption
- Financial reporting documents
- Legal compliance records
A business's bylaws consistently change over time. They often start out vague and can become quite complex over time, as the business establishes new regulations and guidelines. Corporation bylaws are not always required but are valuable in guiding a business. Additionally, the bylaws may be used in court if disputes arise between corporate partners.
How to Amend Articles of Incorporation
There are a few important steps involved when amending articles of incorporation.
- Review the company's bylaws: Many corporations have a clause stating the necessary process to amending articles of incorporation.
- Schedule a meeting with the business's board of directors for a vote: Some states require that the board of directors approve the changes. It is also important that the quorum is present at the meeting, meaning that there are sufficient attendees to vote on the intended changes.
- Draft the intended changes to the articles of incorporation: Be sure to check filing requirements in your state. Your Secretary of State might also have pre-approved corporate forms to use when changing articles of incorporation.
- Thoroughly review the changes: Working with an attorney that is familiar with the corporate law can prevent any expensive or timely mistakes.
- File the amendment form with the Secretary of State by mail or in person: The amendment should be attached to the original articles of incorporation. Keep a copy for your own business records, too. Be sure to include a check with the required amount based on your state requirements.
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